Your employer has offered to contribute $50 a week to your retirement savings account. Assume you work for this employer for another 15 years and earn an average return of 8.5 percent, compounded weekly, on your savings. What is this offer worth to you today? O A) $39,000 OB) $42,315 Oc) $22,032 OD) $81,309

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA3: Time Value Of Money
Section: Chapter Questions
Problem 7CE
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Your employer has offered to contribute $50 a week to your retirement savings account. Assume you work for this employer for another 15 years and earn an average return of 8.5 percent, compounded
weekly, on your savings. What is this offer worth to you today?
O A) $39,000
OB) $42,315
Oc) $22,032
OD) $81,309
10
56°F Cloudy ^
2/1
P Type here to search
Transcribed Image Text:Delay Your employer has offered to contribute $50 a week to your retirement savings account. Assume you work for this employer for another 15 years and earn an average return of 8.5 percent, compounded weekly, on your savings. What is this offer worth to you today? O A) $39,000 OB) $42,315 Oc) $22,032 OD) $81,309 10 56°F Cloudy ^ 2/1 P Type here to search
Expert Solution
Step 1

Number of weeks (n) = 15 years x 52 weeks = 780

Weekly interest rate (i) = 8.5%/52 = 0.16346153846% = 0.0016346153846

Payments = 50

 

 

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